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Black Mountain HR Questions
Do you have an HR question?
If so, please contact us at: askme@blackmountainhr.com
Current Topic
A lot of people talk about strategic HR and being an HR business partner but what does this mean in reality? In very simple terms, HR strategy should work hand-in-glove with the overall business strategy of an organisation.
An HR strategy should focus on how to attract, retain and develop the right people to ensure that business goals are met. The key elements of an HR strategy can be summed up by culture, organisation, people and HR systems. When implementing or amending any policy or system within HR, the following question must be asked: “Does this initiative directly support the business objectives of the company?” The transactional or administrative side of HR is the process of delivering those initiatives, policies or systems in the most effective way.
The key for HR professionals is to spend as much time as possible tweaking HR strategy to better support the business and to ensure that the HR department is as cost effective and efficient as possible from a transactional point of view. What tends to happen is that even fairly senior staff get sucked into the transactional side of HR. In an ideal world an HR Director would spend 100% of their time focussing on strategy, and not on operational issues, but realistically the goal should be to get as close to this as possible.
In large multinationals with large HR departments, the head of HR should be able to spend as much time as possible on strategy utilising assistance from functional experts, external vendors, the very best HR technology and a solid support infrastructure. Smaller companies with less resources need to work even closer with external vendors to access the best technology, expertise and transactional support. What functions should be kept in-house or outsourced are important considerations for every HR department.
Below is a table that highlights some of the differences between strategic and transactional HR tasks:
| Strategic Human Resources
| HR Transactions
| Recruitment
| - Manpower Planning
- Senior Level Interviews
- Ensuring management have the skills
they need to conduct proper interviews
| - Resume Screening
- Offer/reject letters
- Employment contracts
| Compensation/
Renumeration
| - Reward Strategy
- Package Design
- Benchmarking
| - Payroll
- Report generation
- Handling employee queries
| Benefits
| - Level of benefits
- Standard or flexible benefits
- Communication to staff
| - Administration
- Claims
- Data Management
- Employee Queries
| Training & Development
| - Needs & Skills Analysis- do
employees have the ability to perform their roles in support of business strategy
- Training Design
- Measuring results of training
- Measuring cost effectiveness of training
| - Logistics
- Record Keeping
- Report Generation
| Performance Management
| - Designing/selecting the most appropriate solution for the company
- identify and retain key performers
- Ensure Management have the skills to evaluate their staff
- Talent Management
| - Logistics
- Record Keeping
- Report Generation
| Organisation Development
| - Change Management
- Corporate Culture
- Succession Planning
| - Administrative Support
| HR Technology
| - Selection- ensure all systems support business and HR objectives
- Evaluation- ensure all technology is up to date and effective. Has the investment saved time, reduced costs and/or improved service levels.
- Customisation- ensure the company is getting the most out of its systems
| - Data input and management
- Report generation
- Liaison with internal and external specialists
| Policies
| - Policy Design
| - Creation and updating of manuals
- Compliance with local labour regulations
- Policy administration- holidays
| HR Vendors
(recruitment, training etc)
| - Selection of vendors
- Preferred Supplier Agreements
- Vendor Assessments
- What could/should be outsourced or kept in-house
| - Initial contact with potential vendors
- Management of vendors
- Day to day communication
| HR/Employee Data
| - Analysis
| - Maintenace
- Report Generation
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HR Questions:
Is it more expensive to use an HR firm or do it in-house?
As a general rule of thumb, an HR outsourcing company can perform routine administrative tasks more efficiently than an in-house HR function and is therefore more cost effective.
However, the reasons behind a company’s decision to consider outsourcing are not always cost driven. Outsourcing as a business strategy can be driven by managing risk, gaining access to technology and/or expertise and improving service levels.
How will my staff react to using an external HR outsourcing firm to handle their benefits?
Simply put, a professional benefits specialist can provide a much higher level of support to employees than an in-house administrator. As long as your staff understand the level of benefits they are entitled to, know where to go with their queries and receive prompt assistance; they will react well to dealing with an external firm.
The key to successes is communication, which can be handled in a variety of ways.
If I have a good IT system to manage all of my HR administration, do I need to use an HR outsourcing firm as well?
HR outsourcing firms are specialists in getting the most out of HR information systems. While IT systems help cut down on paper based administration, they still need to be maintained. If you outsourced the administration and maintenance of your IT system, including all data inputting, to an HR outsourcer, you would receive all of the benefits and none of the usual technology related headaches.
Furthermore, even if you have a “good” IT system, the systems and process used by an HR outsourcer are usually better. By using an HR outsourcer you gain access to better technology without having to incur the costs of buying a new system yourself.
Is it cost-effective for a small firm to use an HR firm to handle routine administration tasks, or does a company have to reach a certain size?
There is no minimum headcount needed to justify HR outsourcing. In fact, SME’s with limited HR resources or infrastructure would benefit greatly from using an outsourced partner to provide a much higher level of support at either the same or a reduced cost. Larger organizations, with significant HR resources and infrastructure in place, can become more strategic and efficient by outsourcing routine and administrative tasks.
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